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SALT LAKE CITY -- A bill aimed at lowering the overall state sales tax rate by increasing the sales tax on food passed through the Senate Revenue and Taxation Committee Tuesday.
Sen. Stuart Adams, R-Layton, says other than education spending, the state basically functions using sales tax revenue, which has fluctuated by the downturn in the economy. To stabilize the revenue he wants to raise the sales tax on food while at the same time lowering the overall tax rate on everything else.
This tax was lowered three years ago under Gov. Jon Huntsman Jr. This bill, which passed the committee 6-to-2, would raise the sales tax on unprepared food to 4.4 percent.
- "It makes us more competitive with internet sales, with out-of-state sales." -Sen. Stuart Adams, R-Layton
- "This is the difference between having dry cereal or putting milk on it, having meat once a week or just living on Top Ramen." -Linda Hilton, Coalition of Religious Communities
Conversely, the bill would lower the base sales tax rate from 4.7 percent to 4.4 percent. This means most communities would see their sales tax rate drop from 6.5 percent to 6.1 or 6.2 percent, depending on where you live.
"It makes us more competitive with internet sales, with out-of-state sales," said Adams.
Advocates for the poor say the bill would be a direct hit on the most vulnerable Utahns.
"This is a tax increase for low-income and middle-income families who spend the majority of their household budget on food," said Linda Hilton, director of the Coalition of Religious Communities.
Those in favor of the bill say the lower food sales tax that was put into place three years ago under Gov. Huntsman really isn't adding up to much in savings for a typical Utah family. They suggest finding ways to help the poor should be more specifically targeted rather than a broad base cut that goes to everyone.
Hilton argues even a few dollars for a struggling family is a big deal.
"This is the difference between having dry cereal or putting milk on it, having meat once a week or just living on Top Ramen. It's a nutritional issue," said Hilton.
Advocates for the poor are also keeping an eye on HB282, which also aims to raise the sales tax on food and adjust other tax revenues. That bill has not yet been scheduled to be debated in a committee.
SB270 will now go to the Senate Floor for a vote.
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Story written by Randall Jeppesen with contributions from Shara Park.
